By Christopher Chan, an associate director and a registered estate agent with Hartamas Real Estate Group

In recent weeks, we have read newspaper reports that the Kuala Lumpur City Hall (DBKL) has issued the “Notice of Revision of the Valuation List” to residents for an increase in assessment rates for properties in Kuala Lumpur. The deadline for submission of the objections from the affected property owners is Dec 17, 2013.

Seeing the news reports and how this has come through, we believe that there could have been a lack of understanding in this area and hence, the objective of us sharing some information for the public at large.

The Notice of the proposed increase in assessment rate is issued by the Property Management and Valuation Department of DBKL in accordance with Section 141 of the said Act. It is stated in the said Notice that anyone who disagrees with the proposed Annual Value as stated therein on any grounds specified under Section 142 of the said Act may lodge an objection thereto in writing and that objection must be received by DBKL within the date stipulated in the said Notice.

It has recently been reported in the newspapers that there has been an outcry against DBKL on its proposal to increase assessment rates for house owners estimated to in the range of 100% to 300%. Various parties have objected and questioned the justification for the new valuation to such a level that will burden and penalise residents and house owners, especially those from the low and middle income groups.

Section 142 (1) of the said Act sets out the various grounds of objection which may be relied on by any person aggrieved with the increase in assessment. The grounds of objections to be made in writing are :

(a) that any holding for which he is rateable is valued beyond its rateable value;

(b) that any holding valued is not rateable;

(c) that any person who, or any holding which, ought to be included in the Valuation List is omitted therefrom;

(d) that any holding is valued below its rateable value; or

(e) that any holding or holdings which have been jointly or separately valued ought to be valued otherwise.

A “holding” is defined in the said Act to mean (among other things) any land, with or without buildings thereon, which is held under a separate document of title and in the case of subdivided buildings, the common property and any parcel thereof. Section 142 (2) of the said Act states that all objections shall be enquired into and the persons making them shall at such enquiry, be allowed an opportunity of being heard either in person or by an authorised person.

The proposed increase in assessment rates was long overdue. Naturally with any proposal that makes a dent in our pockets, we would be gravely unhappy. Therefore as property owners ourselves, we understand the sentiments of the affected public. The last revision was over two decades ago. During the time interval, costs have naturally increased in tandem with the inflation rate of the country and hence, the rationale for the increase. DBKL wishes to obtain an extra RM 400 million to upgrade roads and other infrastructures.

Let us look at the subject matter of the assessment and the prevailing laws governing it to gain a deeper understanding.

Assessment rates (Cukai Taksiran/ Cukai Pintu)

The subject matter of assessment rates is governed by the Local Government Act 1976 (Act 171) and Subsidiary Legislation.

The Local Government Act 1976 of Malaysia (“the said Act”) was enacted to revise and consolidate the laws relating to local government. The local government or local authority has the power to collect taxes (in the form of assessment tax), to create laws and rules (in the form of by-laws), to grant licenses and permits for any trade in its area of jurisdiction, to provide basic amenities, as well as planning and developing the area under its jurisdiction (among other things).

Assessment rates are imposed to finance a number of activities such as collection of refuse, cleaning of roads, cutting of grasses and trees, building of roads, street lightings, Community Halls, public toilets, etc. The money collected goes to the respective local council that governs a particular area. The estimated annual rental of the subject property is the basis of what the council will use to determine the rates to be charged. There is a certain percentage assigned to this. The percentage can be as low as 2% for agricultural land to as high as 12% for commercial properties.

It is interesting to note that vacant land with title can also be levied with an assessment as well. The amount charged varies according to the properties’ classification (residential/commercial/ industrial/ land).

As an illustration, we provide you with two real cases of properties within the jurisdiction of DBKL.

1) Robson condominium in Persiaran Syed Putra 2, Kuala Lumpur. The current assessment is based on the annual rental value at 6% of RM 20,400 (with built-up of 1,270 sf) which comes to RM 1,224. Therefore the owner has to pay RM 612 every 6 months. The proposed new annual rental value is RM 22,200, an increase of 8.8% and therefore the new assessment rate is RM 666 per 6 months, a mere increase of RM 54.

2) Townhouse in Taman Bandaraya, Kuala Lumpur. The current assessment is based on the annual rental value at  6% of RM 10,200  which comes to RM 612. Therefore the owner has to pay RM 306 every 6 months. The proposed new annual rental value is RM 25,200, an increase of 147% and therefore the new assessment rate is RM 756 per 6 months, an increase of RM 450.

When it has to be paid

The assessment should be paid twice a year, i.e. on the first half of the year (January 1 to February 28) and second half of the year (July 1 to August 31). If you have not received an assessment bill during the stated time, then you should visit your local council bringing along your previous bill and/ or your account number of your assessment bill in order to get a printout of the latest.

You can visit the website of your local council and register as a user for purposes of checking and payment of assessment.

What is the penalty if the property owner does not pay the assessment?

1) A fine of RM 20 (for outstanding amount exceeding RM 100).

2) Notice (Form E) shall be issued and the outstanding amount has to be settled within fifteen days from the date of the notice.

3) After the fifteen days are up, a warrant of arrest shall be issued. The cost of the warrant is RM 100.

4) Notice of seizure and to sell the property by auction.

5) Legal action to be taken by the Courts.

6) All the above costs shall be included in the overall outstanding amount.

What happens if the owner of the property has sold/ transferred his property? 

The owner needs to complete Form I and J (Notis Pindahmilik and Pegangan Berkadar). This form can be obtained from City Hall’s website. You can just download it, print it out and fill in your particulars.

For properties under the jurisdiction of City Hall, you should go to :

Dewan Bandaraya Kuala Lumpur, Jabatan Penilaian & Pengurusan Harta, Tingkat 4, Bangunan TH Perdana,

No. 1001, Jalan Sultan Ismail,

50250 Kuala Lumpur

(Tel no: +603- 261 71038).

Please remember to provide these documents:

A full copy of the Sale and Purchase (S&P) Agreement

A copy of the latest Assessment Bill showing the amount paid by you

A copy of the Identity Card (IC) of the relevant parties

Failure to do the above within three months from the date of your S&P Agreement/ transfer can result in a fine of not more than RM 2,000 or jail of not more than six months or both.

What if your property is vacant/ is uninhabited

If your property is vacant or is uninhabited for more than 1 month, you can apply for remission (Permohonan Pulangan Balik atau Remisi) by completing Borang Permohonan Elaun Kekosongan/ Remisi which can be obtained from your local council’s website.

This is subject to some conditions as follows:

The subject property is in a good and liveable condition

To show proof that all efforts have been done to get tenants. You would have to provide evidence of advertisements

That the subject property is vacant for the time period that you are applying to get the refund of the assessment paid earlier.

For offices, commercial properties and warehouses, only areas of more than 1,000 square feet on the same level is eligible to apply for remission


This article is intended to provide information and does not constitute advice for specific needs. You should obtain independent professional advice for your specific needs and situation.

About the Contributor

Christopher Chan is an associate director and a registered estate agent with Hartamas Real Estate (M) Sdn Bhd.

He holds a Bachelor of Arts (BA) (Victoria University of Wellington, New Zealand), a Post Graduate Certified Diploma in Accounting & Finance (CDipAF) (The Association of Chartered Certified Accountants (ACCA), United Kingdom) and a Master of Business Administration (MBA) (Edinburgh Business School, Heriot-Watt University, Scotland).

He is a Certified Residential Specialist (CRS) (The National Association of Realtors, USA) and is a member of the Malaysian Institute of Estate Agents (MIEA).

He was the elected Director and Membership Benefits Chairman of the Malaysian Institute of Estate Agents (MIEA) for the term 2017 to 2019.

He was a lecturer at UCSI University in the year 2008 to 2009 and is currently an Industry Advisory for the Executive Diploma in Real Estate (EDRE) and Diploma in Real Estate Management (DREM) programmes at UCSI College, Kuala Lumpur campus.

Christopher regularly speaks and writes on real estate in the media.

He can be contacted at +6012 2323 837.

(Note: this article was published on 12 April 2013 on Star Property)

By Christopher Chan, an associate director and a registered estate agent with Hartamas Real Estate Group